Argentina will get the biggest corn production in 13 years

On Feb. 14, 2013, according to the Buenos Aries Cereal Exchange, Argentina will harvest a record high production of corn by 25 million tonnes in the season of 2012/13. If this estimation comes true, the production of corn will be 16.3% higher than 21.5 million tonnes in the previous season.

Besides the Buenos Aries Cereal Exchange, the US Department of Agriculture (USDA) even estimated that the production of corn in Argentina will reach 27 million tonnes in 2012/13. Anyway, be it 25 million tonnes or 27 million tonnes, the estimation of corn production in Argentina in 2012/13 will be the highest in the past 13 years.

Although the production of corn in Argentina will break a record in 2012/13, the planting area of corn is lower than that in the previous season. According to data from the Buenos Aries Cereal Exchange, the planting area of corn in Argentina is about 3.6 million ha. in 2012/13, suffering a decline of approximately 15% compared with that in 2011/12.

In fact, some regions in Argentina suffered from the drought before Jan., 2013 and has high thermal records. These factors would cause the losses in yield potential of crops. However, the rainfall comes in late Jan., 2013 improves the soil conditions and encourages the development of crops.

With the record production of corn expected in Argentina, the local government will boost the corn exports in 2012/13. Some experts think that it will increase the corn supply in the world, thereby helping ease the global corn price. However, the technical manager of the Federation of Agriculture and Livestock of Mato Grosso (Famato) considers that the expected increasing exports of corn in Argentina could not have a great effect on the international market.

According to the data from USDA, Argentina is the third largest exporter of corn in the world, behind Brazil and the US. The export volume of corn is estimated to reach 19.5 million tonnes in Argentina in 2012/13, accounting for an approximate 20% of world's total corn export volume and 72% of Argentina's total corn production in 2012/13. But in Brazil, the total export volume of corn is expected to just account for about 34% of the total domestic production in 2012/13. It means that even if Argentina exports all of its corn produced, its effect on the international market should be very limited.

Crop Protection South America Monthly Report is a monthly publication released by CCM. It offers timely update and close follow up of South America's various kind of crop market dynamics, analyze the market data and trends. Major columns include companies' current dynamics and market situation, a close watch of government policies and regional dynamics.

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